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FICO Changes Score Calculations: Will Your Score Rise?

by Frank Taglienti

FICO Changes Score Calculations: Will Your Score Rise?


A change in the way the popular FICO credit score is calculated could boost your score if:

  • You've settled past debts with a collection agency.
  • You have unpaid medical bills.
  • Your credit is thin because you're just starting out or you're a retiree who no longer uses a lot of credit.

Fair Isaac, the company that sells the FICO credit score to mortgage lenders, auto lenders, credit card companies and banks, says it’s changing its formula to give less importance to unpaid medical bills and debts that consumers settled with collection agencies.

In general, the higher your credit score, the less interest you pay when you borrow money to buy a home or a car, or to pay via a credit card. If your score drops too low, you may not be able to get a loan or a credit card.

Here’s what will change starting this fall:

  • If your medical debt is the only unpaid bill on your credit report: Your score could rise by about 25 points. 
  • If your debt was sold to a collection agency and you then paid it: That won’t lower your FICO score.
  • If you don't use credit much: Fair Issac will use other data, like rent payments, to bolster the accuracy of your score.

Fair Issac made the change after a Consumer Financial Protection Bureau report argued that medical debt isn't a strong indicator that a consumer won’t pay other types of debt. 

When your credit score rises, chances are you’ll first see an improvement in the rates you’re charged for credit cards, auto loans and personal loans.

Your mortgage rate may take longer to come down because most lenders follow Fannie Mae and Freddie Mac’s lending guidelines. Those guidelines tell lenders to use a very specific mortgage credit score rather than the latest version of the FICO score.

Currently, the average Fannie Mae borrower has a FICO of 744, while the average Freddie Mac borrower has a 749.


5 Master Bedroom Upgrades That Make You Feel Like Royalty

by Home Action News

5 Master Bedroom Upgrades That Make You Feel Like Royalty


You'll feel like you're in a deluxe resort without leaving home when you make any of these five upgrades to your master bedroom:


Skylights let you look at the stars at night while lying in bed or be awakened by a splash of sunshine in the morning. They're also an energy-efficient way of adding warming sunshine to your bedroom in winter. If you want to cool down in summer, buy skylights with automatic shades

Deluxe Closets

You may not have room for a glorious walk-in, but you can turn your regular closet into an organized gem with built-in units for long and short hanging clothes, shoes, belts, slacks and even hats.

Heated Floors

Warm up your bedroom by placing radiant heat under new hardwood or tile floors. Not only will it feel good under your feet, but it will lower heating costs, too.

Mattress Topper

You'll be amazed how much more luxurious your bedroom will feel when you top your mattress with a thick, cushy bamboo mattress topper bamboo mattress topper. Make your bed with soft sheets and a down comforter, and you'll never want to leave your bedroom.

Soft Lights

LED string lightscreate a soft, romantic glow. Some come with an adhesive backing so you can easily install them over your crown molding.

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Contact Information

Photo of Frank Taglienti Real Estate
Frank Taglienti
Berkshire Hathaway PenFed REALTORS®
565 Benfield Road, Suite 100
Severna Park MD 21146

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